Jagdeo says economy slowing down, but offers no clear solution

Oct 21, 2016 News

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By Kiana Wilburg
Opposition Leader, Bharrat Jagdeo, continues to hold the coalition Government solely responsible

for the slowdown in the economy.
It is a mantra that he has been singing consistently at his press conferences and yesterday’s meeting with the press at Freedom House was no different.
But challenged to put aside his criticisms and provide a solution, Jagdeo said, “There are lots of things that could be done. But first of all, it is the government having a matrix that allows development; that is infused with the philosophy of growth and development.”
Jagdeo said that this matrix for growth must be shielded from extraneous issues that can harm that objective.
The issue became even more confusing. “This matrix has to be composed of consistent, clear policies to investors …(But) What you have now is every single Minister commenting on issues that could harm the investment environment. So it must be clear. I am just going to talk broadly because I can go into details but I don’t want to do so at this press conference.”
The Opposition leader said that consistency with policies which include incentives is also a must. He did not say what specific policies he meant in this regard or what the incentives should be. The former President said that there must also be uniform application when it comes to those policies.
Also, part of his solution is for the Minister of Finance, Winston Jordan, to focus more on growth rather than managing for ratios.
Jagdeo said, “So I think if those things happen, clear guidelines to investors, uniformity in application of those guidelines and an enabling budgetary environment supporting those initiatives that you can do well in an economy like ours. I can disaggregate those three into hundreds of examples and policies…”

The optimistic Opposition Leader also said that within the first 24 hours of the PPP assuming office in the future, there are already 22 things which his regime would have to reverse. He said that these issues are economic in nature.
But challenged to name just two of those 22 things, Jagdeo said, “Not at this press conference; maybe another time.”
Jagdeo also bemoaned criticisms that the government inherited an economy that was grossly mismanaged and left in a terrible state.
He said that for 10 years straight, under the PPP, Guyana was touted as having one of the fastest growing economies in the region and perhaps in the western hemisphere.
Jagdeo said that under the PPP, most sectors were doing well, the revenue base was solid, they left a pipeline of multimillion dollar projects, and oil was found during its tenure in office, among other things.
“So how can you say you inherited an economy that was in bad shape? You have to be sick, delusional to say this. So that is the new explanation…”
It was only a few days ago that President David Granger in his address to Parliament, chronicled the industrial catastrophes that his Government inherited from the PPP regime.
The President said that the coalition administration entered a depressing financial landscape in May 2015. He said that the economic legacy that the nation inherited was characterized by a lack of strategic planning and whimsical decision-making.
Granger said that the absence of a policy to provide employment opportunities for youth and to reduce extreme poverty and the failure to energize the manufacturing sector weakened the economy.
He stressed that economic mismanagement was accompanied by huge debts for unpaid international obligations and court judgments. The Head of State said that the gravest financial problem was the bankruptcy of the Guyana Sugar Corporation (GUYSUCO) which owed $89 billion in debts.
“Your Government was forced to divert money from economic development and social projects to rescue the ailing corporation with an immediate injection of $12 billion. An additional $11 billion had to be provided the next year, 2016, making a total of $23 billion bailout in 18 months,” the President said.
Granger said that these transfers exclude the servicing of GUYSUCO’s debts in respect of the Skeldon Estate Modernization Project which he deemed as a monstrous and monumental US$200 million mistake and, probably, Guyana’s single most costly industrial catastrophe of all time.
Furthermore, the President said that paddy farmers in the rice industry were not spared the previous administration’s reckless mismanagement.
He said, “The PetroCaribe Fund – used to meet payments to farmers for rice and paddy shipped to Venezuela – contained less than US$1 million in May 2015. Your Government was forced to make available nearly $4 billion immediately so that poor paddy farmers could be paid.”
Granger continued, “Your Government inherited a large number of liabilities, including judgements in excess of US$34 million (or G$7 billion) in favour of NH Elias, in respect of the East Bank Demerara Road; judgement for $1.3 billion in favour of Rudisa Beverages; judgement in favour of Trinidad Cement Limited; settlement for$1.4 billion with B.K. Tiwarie on Haags Bosch Project and several other judgements that will cost the State.”
He added, “Your Government, also, was obliged to provide another $5.4 billion bailout to the National Insurance Scheme as a consequence of the previous administration’s irresponsible CLICO investment.”
The President said, too, that the Government, despite encountering this immense mountain of debt, was able to meet commitments to the nation’s hard-working public servants. The minimum wage grew from $39,520 in May 2015, to $55,000 in January 2016, an increase of 39.2 per cent in seven months.
Granger said that public servants have benefitted, in addition, from the raising of the tax threshold, from $600,000 in May 2015 to 660,000 in January 2016; the removal of income tax from workers’ contributions to the National Insurance Scheme and a tax-free payment of $50,000 to all workers earning less than $500,000, in December 2015.
He said that these benefits, taken together, augmented workers disposable income significantly.

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